S.D. dairy industry continues to expand

Due to ample supplies of both food and water, the sustainable future of South Dakota's dairy industry looks bright.

"Sustainable dairies of the future need to be located in areas with ample supply of both water and feed. South Dakota as a state offers all these advantages and its part of the reason why between 2012 and 2013 dairy cow numbers in the state increased from 92, 000 to 94,000," said Alvaro Garcia, Professor & SDSU Extension Dairy Specialist.

During the same timeframe, the total number of milk produced in the state grew by 2.8 percent from 1.97 to 2.02 billion pounds, making it the seventh largest growth in the country. Of the top 23 dairy reporting states according to USDA, only Colorado at 3.4 percent grew more.

As of 2013 South Dakota ranks 21st in the U.S. for overall milk produced and ranks 22nd in total number of dairy cows.

Garcia said that well-being is critical for cows. "They need to be supplied with competitively-priced feed and water and be comfortable and well-cared for. Water has been identified as one of the critical items for the future of sustainable agriculture, particularly in the western/southwestern region of the U.S," he said.

However, he said feed and water are not enough in today's fuel-strapped world.

"First and foremost what is needed is a vibrant local processing industry that minimizes transportation costs and adds value to milk," Garcia said.

Several milk processing plant upgrades as well as new start-ups are taking place in the state. The SDSU Dairy Science Department was deeply involved at various stages of these developments.

Garcia lists DAVISCO Foods of Lake Norden and Valley Queen Cheese of Milbank as two examples of existing processing plants.

DAVISCO Foods, an international company that supplies a major portion of Kraft Foods cheese products, started in 2001 with their $40 million, 85,000-square-foot facility expansion project in its Lake Norden plant. The Lake Norden Cheese Company as it was named began full production in 2004 encouraging dairy producer's expansion and relocation. Starting in 2009, Valley Queen Cheese of Milbank, S.D. underwent a two-year expansion project with an 80,000-square-foot warehouse addition and a 12,000-square-foot dryer addition to their current plant.

A milk processing plant new to the state in 2014 is Bel Brands USA. The company manufactures and markets "The Laughing Cow" cheese wedges and Mini Babybel - America's No. 1 branded snacking cheese, as well as Boursin, Merkts, Kaukauna, and other natural and gourmet cheese spreads.

The Company will invest approximately $100 million in its new plant on a 48-acre land parcel in Brookings. Phase 1 of the project will have a production capacity of approximately 22 million pounds or 10,000 metric tons. The second phase, contingent on anticipated increased market demands, is envisioned to be built in 2016-2017, bringing 200 additional jobs to the area.

Why is the dairy industry expanding in South Dakota?

"All this is excellent from a strictly dairy business perspective. However, other parts of the country offer similar economic environmental conditions and even milder weather," said Garcia. "What is it about South Dakota that has made the difference? Quality of life is oftentimes mentioned as a decision to move or relocate. Could this be making a difference for South Dakota?"

Maybe it's South Dakota's high well-being score? Garcia explains that according to the most recent 2013 Gallup-Healthways poll, which surveyed 176,000 people from all 50 states in the U.S., South Dakota ranked in the top two for well-being (along with North Dakota).

"South Dakota respondents were among the most likely in the U.S. to report good emotional health. Ninety percent reported enjoying a large portion of their day, and more than 93 percent felt happy during the previous 24 hours, more than any other state," Garcia said.

The state's unemployment rate in December at 3.6 percent tied for the second lowest in the U.S. Not only did much of the workforce in South Dakota have a job, but also were more likely to enjoy their work environment.

"The success of South Dakota as a dairy state is not just that its climate and economic conditions are conducive to profitable and sustainable agricultural practices. It is foremost a combination of those with a living environment where well-being and quality of life is currently rated among the two highest in the nation," Garcia said.